SEC Sues Florida Men for Bilking Teachers in $22 Million Scam

The U.S. Securities and Exchange Commission sued two Florida men, claiming they defrauded teachers and retirees in a $22 million Ponzi scheme by posing as a private-equity fund while enriching themselves.

James D. Risher and Daniel Sebastian fraudulently lured more than 100 investors with promises of annual returns of as much as 124 percent, the SEC said today in a lawsuit filed in U.S. District Court in Florida. Risher, who spent 11 of the past 21 years in jail, spent customers’ funds on jewelry, gifts and real estate in North Carolina and Florida, the SEC said.

“Risher, who masqueraded as a highly successful equity trader, teamed up with Sebastian to tout sophisticated trading strategies they claimed would generate substantial profits,” Eric Bustillo, head of the SEC’s regional office in Miami, said in a statement. “Instead, Risher and Sebastian used investors’ life savings and retirement nest eggs to line their own pockets.”

Sebastian attracted clients from his prior job as an insurance broker, persuading at least one investor to liquidate an annuity and invest the proceeds in the fund, according to the SEC. The two men paid themselves millions of dollars in fees and sent customers false account statements, the SEC said.

Burton Wiand, Sebastian’s attorney, said in a telephone interview that his client had been “deceived” by Risher and voluntarily reported the scheme to the SEC and criminal authorities once it became evident to him. Sebastian has since cooperated with government officials as well as attorneys representing former clients, Wiand said.

Risher was indicted on related criminal charges June 29. A phone call to Adam Allen, a public defender who has represented Risher in the criminal matter, wasn’t immediately returned.

To contact the reporter on this story: Joshua Gallu in Washington at

To contact the editor responsible for this story: Lawrence Roberts at

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